Wednesday, January 25, 2012

The difference of " isms ". Is there any?

Capitalism is a system wherein a country's capital wealth is largely in private hands whereas in socialism and, more so in communism, the state is in control. But in reality people who control the state control the money. The difference is in the numbers of people who have access to capital and hence have some say in how it is used. We can say that every system is really a different variant of capitalism. In Individual Capitalism a dictator has direct control over state coffers and owns all the public wealth. However, to stay in power, a dictator has to share some of the spoils with his family, followers, police and armed forces such as in Zimbabwe and North Korea. Then there is Crony Capitalism of which there are many types. In China the Communist Party owns everything including all the land. Thus party functionaries can and do usurp land from farmers to sell it off for fat profits to developers. The party ensures a high rate of growth which provides enough material gains to the people to keep them quiet. In India the opposite prevails. Politicians ensure that a majority remains dirt poor so that they can be bribed with public money at election times. The educated middle class is seen as a nuisance to be harassed with draconian laws and extortionate taxes. In Russia state assets were virtually given away to insiders to create a bunch of oligarchs who are on the run from Putin's raiders. In the US fatcats ensure that regulations remain weak so that they gamble with people's money, destroy the environment and buy politicians with campaign finance money to ensure that taxes for the rich remain low. Thus Mitt Romney paid $3 million tax on an income of $21.7 million in 2010 for a rate of 13.9% and $3.2 million on an income of $29.9 million in 2011 for a rate of 15.4%. The top rate of tax on wages and salaries is 35%. The fairest system is Democratic Capitalism, such as in parts of Europe, where people are taxed at high rates and the state delivers high quality services such as maternity benefits, unemployment benefits, education, healthcare and pensions to everyone. As in every system this is highly vulnerable to corruption. In Greece the rich did not pay taxes and civil servants awarded themselves high salaries, early retirement pension and even had bonuses for washing hands. We should compel politicians to stop using terms such as socialism just to confuse people. The media can help by educating people so that they can see through the lies. Only then can we have a fair system of government.

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